Regulatory capital buffers

Bank, similarly to other banks in Poland, is obliged to maintain the capital conservation buffer of 1.25% from 2016.

Bank received in October 2016 the decision of Polish Financial Supervision Authority (KNF), regarding identification of the Bank as other systematically important institution and imposing on the Bank and on the Group the other systematically important institution buffer in the equivalent of 0.25% of total amount of the risk exposure.

In October and December 2016, Bank and Group received from Polish Financial Supervision Authority a recommendation to maintain own funds for the coverage of additional capital requirements at the level of 3.09 p.p. (Bank) and 3.05 p.p. (Group) in order to secure the risk resulting from FX mortgage loans granted to households, which should consists of at least 75% of Tier 1 capital (which corresponds to 2.32 p.p. in Bank and 2.29 p.p. in Group), and should consists of at least 56% of common equity Tier 1 capital (which corresponds to 1.73 p.p. in Bank and 1.71 p.p. in Group)[3].

Bank and Group are not subjected to the additional own funds requirements based on the supervisory review process as referred to in point (a) of article 104(1) of Directive 2013/36/EU. (CRR 438.b)

As a result of the above decisions and recommendations, and another requirements defined in CRR, as well as KNF recommendation for Polish banks (TCR of 12% and Tier 1 Capital Ratio of 9% as the expected minimum base in Poland), the Group has to comply with the following minimum capital ratios:

  • Tier 1 Capital Ratio (T1) = 9+1.25+0.25+2.29 = 12.79% (for the Bank 12.82%)
  • Total Capital Ratio (TCR) = 12+0.25+1.25+3.05 =16.55 % (for the Bank 16.59%).

It needs to be emphasized that presented above expected by KNF levels of capital ratios are significantly higher than these required by CRR (European regulation).

The Bank and The Group are not obliged to maintain own funds requirements in scope of systemic risk buffer and anticyclical buffer (Art. 440).

[3] That recommendation replaces the previous one, to maintain the Bank’s own funds for the coverage of additional capital requirements at the level of 3.83 p.p., which should have consisted of at least 75% of Tier 1 capital (which corresponded to 2.87 p.p.).
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